Court filing

Verified Emergency Class Action Complaint — Sport & Wheat CPA v. ServisFirst Bank (N.D. Fla. 2020)

Filed April 26, 2020 in Sport Wheat v. Servisfirst; one of 6 filings from this case.

Record facts

Court	U.S. District Court for the Northern District of Florida, Pensacola Division
Filed	2020-04-26

U.S. District Court for the Northern District of Florida, Pensacola Division · No. 3:20-cv-05425-TKW-HTC · Doc. 1 · 2020-04-26 · Docket on CourtListener

Full text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION

SPORT & WHEAT CPA PA, a Florida )
corporation, individually and on behalf
)
of a class of similarly situated businesses )
and individuals,

)

Plaintiff,

)

)
v.

)
Case No.: ____________

)

SERVISFIRST BANK INC. , SYNOVUS )
TRUST COMPANY, NATIONAL
)
ASSOCIATION and DOES 1-100,
)
inclusive,

)
JURY DEMANDED

)

Defendants.

)

VERIFIED EMERGENCY CLASS ACTION COMPLAINT FOR, INTER
ALIA, DECLARATORY AND INJUNCTIVE RELIEF

Plaintiff SPORT & WHEAT CPA PA (“Plaintiff” or “S&W”) brings this
verified emergency class action complaint (the “Complaint”) on behalf of itself and
those similarly situated against Defendants SERVISFIRST BANK INC. (hereinafter
“ServisFirst”), SYNOVUS TRUST COMPANY, NATIONAL ASSOCIATION
(hereinafter “Synovus”) and DOES 1-100, inclusive (collectively with ServisFirst
and Synovus, the “PPP Lenders”) to stop the PPP Lenders’ unlawful conduct and to
obtain redress for all persons and businesses injured thereby. For its class action
complaint, Plaintiff alleges as follows based upon its personal knowledge and upon
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 1 of 35

information and belief, including investigations conducted by its attorneys.
Given the importance of this issue to CPA firms, attorneys and other financial
professionals that are tirelessly and diligently working to assist PPP Lenders’ small
business customers (“Bank Customers”) to obtain PPP loans so that the Bank
Customers can avoid laying off literally hundreds of thousands, if not millions of
American workers, and because the facts necessary for this Court to issue a
temporary restraining order enjoining PPP Lenders from refusing to compensate
PPP Agents for the critical services they are providing to implement the Paycheck
Protection Program (“PPP”) are a matter of public record of which this Court can
take judicial notice, S&W is respectfully requesting that this Court undertake this
cause that is vital to the American economy and the national interest on an
emergency basis and order expedited briefing and set a hearing on this matter as
soon as possible.
INTRODUCTION
1.
In response to the COVID-19 pandemic, Congress enacted the
Coronavirus Aid, Relief, and Economic Security Act (hereinafter the “CARES
Act”). Among other programs, the CARES Act established the PPP which provides
emergency “loans” to small businesses. Under the CARES Act, the United States
Small Business Administration (“SBA”) administers the PPP.
2.
Although nominally labeled a “loan,” as the name “Paycheck
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 2 of 35

Protection Program” implies, Congress in fact intended for these PPP loans to be
used by small businesses so that the “paychecks” of American workers would be
“protected” during the two-month period which was projected to be the most
economically difficult period of the pandemic crisis (as opposed to these small
businesses shuttering and laying off their workers during such period).
3.
Accordingly, the PPP provides that if a small business uses a PPP loan
to continue paying its employees during such two-month period, all or a substantial
portion of the PPP loan would be “forgiven.” In general, the amount of a PPP loan
a small business could receive was therefore limited to two and half times the
business’ monthly payroll.
4.
To compensate the PPP Lenders that process the PPP loans for the
SBA, the PPP provides for the PPP Lenders to receive a processing fee equal to a
percentage of each loan amount.
5.
The PPP also envisioned that some Bank Customers of the PPP Lenders
would need the assistance of accountants, attorneys or other financial professionals
(“PPP Agents”) to assemble, prepare, process and file their PPP loan applications.
To incentivize PPP Agents to provide such assistance to the Bank Customers so that
the Bank Customers could successfully apply for and obtain PPP loans and therefore
avoid laying off their employees, the PPP mandates that the PPP “Agent fees will
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 3 of 35

be paid by the lender out of the fees the lender receives from SBA.” 1
6.
Conversely, in order to ensure that the PPP loan proceeds were used
only for their intended purpose, viz., to protect the paychecks of the employees of
the small businesses, the PPP further provides that PPP “Agents may not collect fees
from the borrower or be paid out of the PPP loan proceeds.” 2
7.
Notwithstanding the clear Congressional intent of the PPP, Defendants
ServisFirst and Synovus (the “Named Bank Defendants”), and, on information and
belief, other PPP Lenders, have adopted policies whereby they are refusing to pay
fees to PPP Agents for their services assisting Bank Customers in obtaining PPP
loans.
8.
As a result of these PPP Lenders’ policies, on information and belief,
thousands of CPAs and other authorized PPP Agents—including S&W in this
action—are not being compensated for their work.
9.
These PPP Lenders’ policies are unjust and un-American and are
unfairly discriminating against the smaller of the small business concerns contrary
to Congressional intent because, on information and belief, such concerns are less
financially sophisticated, are less likely to employ in-house accountants or lawyers
and therefore would be more likely to need the services of a PPP Agent to

1 SBA first Interim Final Rule, issued on April 2, 2020 (the “SBA First Interim Rule”), 85 FR 20816.
2 Id.
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 4 of 35

successfully apply for and obtain a PPP loan.
10.
Indeed the CARES Act specifically provides that “[i]t is the sense of
the Senate that the Administrator should issue guidance to lenders and agents to
ensure that the processing and disbursement of covered loans prioritizes small
business concerns and entities in underserved and rural markets, including
veterans and members of the military community, small business concerns
owned and controlled by socially and economically disadvantaged individuals
(as defined in section 8(d)(3)(C)), women, and businesses in operation for less
than 2 years.”3
BACKGROUND
11.
Small businesses are the backbone of the American economy. Indeed,
about half of the people that work in America work for a small business. These
businesses and their employees have been hit hard due to the global COVID-19
pandemic.
12.
On March 11, 2020, the COVID-19 outbreak was characterized as a
pandemic by the World Health Organization (WHO). Most countries of the world
adopted travel restrictions and stay-at-home policies in order to slow the spread of
COVID-19 and “flatten the curve” so as to not overwhelm the health industry’s

3
15 U.S.C. §636(a)(36)(P)(iv) (emphasis supplied).
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 5 of 35

capacity to treat patients.
13.
On March 13, 2020, President Trump issued a proclamation declaring
a national emergency concerning the COVID-19 pandemic.
14.
On March 25, 2020, in response to the economic fallout of the COVID-
19 crisis, the United States Senate passed the CARES Act. The CARES Act passed
the House the next day and was signed into law by President Trump on March 27,
2020.
15.
The CARES Act established a $500 billion government lending
program for distressed companies. Unprecedented in size and scope, the legislation
was the largest-ever economic stimulus package in U.S. history, amounting to 10%
of the total U.S. gross domestic product.

16.
As part of the CARES Act, the Federal government created the PPP, a
$349 billion loan program administered by the SBA for small businesses with funds
available for loans originated from February 15 through June 30, 2020. The PPP is
intended to provide American small businesses with eight weeks of cash-flow
assistance through 100 percent federally guaranteed loans. The SBA is a United
States government agency that provides support to entrepreneurs and small
businesses. The loans were backed by the Federal Government and SBA but
administered by private banks. One of the most important aspects of the PPP loans
is that the terms provide criteria for loan forgiveness through a process that
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incentivizes companies to retain, and not “lay off” employees during this crisis.
17.
In exercising its authority to administer the PPP, the SBA determined
that it was the intent of Congress in passing the CARES Act that the fees to be paid
to PPP Lenders thereunder would be paid by the SBA. Indeed, the SBA First Interim
Rule clearly provides that the “SBA will pay lenders fees for processing PPP
loans.”4
18.
Similarly, the SBA determined that it was Congress’ intent that the PPP
“Agent fees will be paid by the lender out of the fees the lender receives from SBA”5
and also that PPP “Agents may not collect fees from the borrower or be paid out of
the PPP loan proceeds.”6
19.
At President Trump’s signing of the CARES Act, ranking member of
the House Small Business Committee Representative Steve Chabot (R-Ohio)
praised the legislation as giving small businesses a great chance to reopen.7 Senator
Marco Rubio (R-Fl), Chairman of the Senate Small Business and Entrepreneurship
stated that the “bipartisan small business package...will provide emergency relief so
that millions of American workers can keep their jobs and millions of small
businesses can stay open.”8 Senate Majority Whip, Senator John Thune (R-SD)

4 85 FR 20816 (April 15, 2020).
5 Id.
6 Id.
7 Remarks by President Trump at Signing of H.R.748, The CARES Act, 2020 WL 1485787, at *67.
8
Sen.
Rubio,
Press
Release,
3/25/2020
https://www.rubio.senate.gov/public/index.cfm/press-
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 7 of 35

stated that the PPP loans provided by the CARES Act “will deliver relief to small
businesses to help them and their workers weather this storm.”9
20.
The United States Department of the Treasury announced that starting
April 3, 2020, small businesses could apply for and receive loans to cover their
payroll and other certain expenses through existing SBA lenders.10 Starting April
10, 2020, independent contractors, single members LLCs and self-employed
individuals could apply.11

21.
Within this context, private banks (i.e., PPP Lenders) serve as an
intermediary between small businesses (i.e., Bank Customers) and the PPP being
administered by the SBA.
22.
Like many small businesses, those businesses rely on the outside
professional services of CPAs and other financial professionals and turned to those
professionals to assist them in applying for PPP loans and for preparing and/or
gathering the necessary documentation, including tax returns, payroll data and other
financial information.
23.
The SBA regulations that govern the PPP loans mandated that the loans

releases?ContentRecord_id=D08E8A75-546A-4C56-A890-B948048E9B5C
9
Sen.
Thune,
Press
Release,
3/25/2020
https://www.thune.senate.gov/public/index.cfm/press-
releases?ID=CA914CF0-5C3D-4A02-B6F2-84925B5467BD
10 https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf
11 Id.
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 8 of 35

be distributed “first come, first served.”12
24.
The financial crisis caused by COVID-19 coupled with the fact that
PPP loans would be partially or entirely forgiven if the loans were used to keep
American workers employed resulted in a huge demand which quickly overwhelmed
PPP Lenders.
25.
As contemplated by the CARES Act and the interim rules issued by the
SBA, PPP Agents were authorized to assist PPP Lenders who were literally
inundated by the demand for PPP loans. Indeed, the PPP was in such high demand
that its initial $349 billion allotment was exhausted after just 14 days and on April
21, 2020, Congress authorized an additional $320 billion for PPP loans.
26.
Under the SBA’s rules, a PPP Agent is defined as an “authorized
representative and can be:
• An attorney;
• An accountant;
• A consultant;
• Someone who prepares an applicant’s application for financial
assistance and is employed and compensated by the applicant;
• Someone who assists a lender with originating, disbursing, servicing,
liquidating, or litigating SBA loans;
• A loan broker; or
• Any other individual or entity representing an applicant by conducting
business with the SBA.13

12 SBA Interim Final Rule § m. [Docket No. SBA-20200015] 13 CFR Part 120 Business Loan Program Temporary
Changes; Paycheck Protection Program RIN 3245-AH34
13 https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.pdf
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 9 of 35

27.
To compensate PPP Lenders for their services in assisting Bank
Customers, the SBA rules provide that a PPP Lender is entitled to receive origination
fees of 5% on loans up to $350,000; 3% on loans between $350,000 and $2 million;
and 1% on loans between $2 million and $10 million.14 That means that a PPP
Lender could receive up to $17,500 for processing loans up to $350,000; up to
$60,000 for processing loans between $350,000 and $2 million; and up to $100,000
for processing loans between $2 million and $10 million.
28.
These same rules provide that a PPP Agent’s
fees will be paid out of lender fees. The lender will pay
the agent. Agents may not collect any fees from the
applicant. The total amount that an agent may collect
from the lender for assistance in preparing an application
for a PPP loan (including referral to the lender) may not
exceed:

• One (1) percent for loans of not more than
$350,000;

• 0.50 percent for loans of more than $350,000 and
less than $2 million; and

• 0.25 percent for loans of at least $2 million.15

(hereinafter, the “PPP Agent Fees Cap”).

29.
For example, that means of the $17,500 that a PPP Lender receives

14 https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.pdf
15 85 FR 20816 (April 15, 2020) (emphasis supplied).
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from the SBA for processing a $350,000 loan, if a PPP Lender’s Bank Customer
uses the services of a PPP Agent to prepare and file the application and supporting
documentation, that PPP Agent must “be paid out of lender fees” but such PPP
Agent’s fees cannot exceed $3,500 (1% of $350,000), i.e., the PPP Agent Fees Cap.
30.
The Named Bank Defendants knew that their Bank Customers had
utilized the services of S&W because when they were asked to compensate S&W
for the services that it had rendered, each of the Named Bank Defendants stated that
they had adopted policies to not compensate any PPP Agents.
31.
On information and belief, to avoid any legal exposure to S&W, some
PPP Lenders have outright refused to process a PPP loan application if it is signed
by or otherwise refers to S&W as the PPP Agent (even though such PPP Lender in
fact knew that S&W had assisted the applicable Bank Customer with such PPP loan
application) or they instead required the Bank Customer to use the PPP Lender’s on-
line PPP application portal to apply for the PPP loan, but they intentionally designed
their portal to prevent the Bank Customer from being able to designate or refer to a
PPP Agent. Because such PPP Lenders have not affirmatively refused to pay S&W,
they are not now being named as Defendants herein, but S&W reserves the right to
do so if S&W later ascertains that such PPP Lenders refuse to pay S&W’s reasonable
and customary fees (not to exceed the PPP Agent Fees Cap).
32.
As the AICPA recently noted in its Special Report dated April 22, 2020,
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CPAs and accounting firms are prohibited from collecting fees from small business
clients they help apply for PPP loans and that “[e]very bank seems to understand the
rules regarding agents and fees a bit differently, and some are agreeing to pay CPAs
for assisting while others are not agreeing to pay CPAs for assisting.”
33.
Plaintiff, on behalf of itself and the proposed class (as defined below),
seeks, inter alia, (i) a declaration from this Court that PPP Lenders must pay PPP
Agents the reasonable and customary fees for their services from the fees paid to the
applicable PPP Lender for a PPP loan (but not in excess of the PPP Agent Fees Cap),
(ii) an injunction enjoining PPP Lenders from discriminating against PPP loan
applications which involve the services of a PPP Agent, including, without
limitation, advising Bank Customers and PPP Agents that PPP Agents may charge
Bank Customers for preparing documents but just not for preparing and filing the
actual 2-page PPP loan application and from refusing to accept PPP Loan
Applications signed by, or otherwise referring to, a PPP Agent and (iii) an award of
damages to S&W and all members of the Class for the reasonable and customary
fees they are entitled to for assisting PPP Lenders’ Bank Customers to successfully
apply for a PPP loan which PPP Lenders have refused to pay as described herein
(but not in excess of the PPP Agent Fees Cap), together with the costs of suit, interest
and reasonable attorneys’ fees and any other relief this Court finds is just and proper.

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JURISDICTION AND VENUE
34.
This Court has original jurisdiction over this Action under the Class
Action Fairness Act, 28 U.S.C. § 1332(d), because this is a class action in which:
(1) at least some members of the proposed Class have different citizenship from any
Defendant; (2) the proposed class consists of more than 100 persons or entities; and
(3) the claims of the proposed Class Members exceed $5,000,000 in the aggregate.
35.
This Court has personal jurisdiction over Defendants because
Defendants do business in this District and a substantial number of the events giving
rise to the claims alleged herein took place in this District.

36.
Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2)
because a substantial part of the events or omissions giving rise to the alleged claims
occurred in this District given that S&W provided services to the Named Bank
Defendants’ Bank Customers who applied for the subject PPP loans while in this
District, and Defendants, as PPP Lenders, marketed, promoted, and accepted
applications for PPP loans in this District.

PARTIES
37.
Plaintiff S&W is a Florida corporation with its principal place of
business in Pace, Florida. S&W is a CPA firm that provides accounting and tax
services to the local community. S&W meets the criteria to be a PPP Agent under
the CARES Act.

Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 13 of 35

38.
On information and belief, Defendant ServisFirst is a Florida
corporation with its principal place of business in Birmingham, Alabama, that
provides, inter alia, banking services to individuals and businesses. On information
and belief, ServisFirst conducts substantial business in this District either directly
and/or through its subsidiaries and/or affiliates.
39.
On information and belief, Defendant Synovus is a national banking
association formed under the laws of the United States with its principal place of
business in Columbus, Georgia that provides, inter alia, banking services to
individuals and businesses. On information and belief, Synovus conducts substantial
business in this District either directly and/or through its subsidiaries and/or
affiliates.
40.
When in this Complaint reference is made to any act of any Defendant,
such shall be deemed to mean that officers, directors, agents, employees, or
representatives of the Defendant named in this lawsuit committed or authorized such
acts, or failed and omitted to adequately supervise or properly control or direct their
employees while engaged in the management, direction, operation or control of the
affairs of the Defendant and did so while acting within the scope of their
employment or agency.
41.
Plaintiff is unaware of the names, identities, or capacities of the
defendants sued as Does 1-100, but is informed and believes and thereon alleges that
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each such fictitiously-named defendant is acting as a PPP Lender and providing PPP
loans to small businesses (i.e., Bank Customers) and is responsible in some manner
for the damages and abridgement of rights described in this Complaint. S&W will
amend its Complaint to state the true names, identities or capacities of such
fictitiously-named defendants when ascertained.

FACTUAL ALLEGATIONS
42.
S&W is a CPA firm located in Pace, Florida. S&W has approximately
1,000 clients, approximately 200-250 of which are small businesses and/or sole
proprietorships.
S&W’s Work as a PPP Agent for PPP Lenders’ Bank Customers
43.
In or around March of 2020, S&W became aware that the CARES Act
and in particular the PPP, had been signed into law.
44.
Like many CPA firms around the country, S&W realized that many of
its small business clients and sole proprietorships could benefit from the PPP and
likely would be applying for PPP loans and accordingly, S&W began to immediately
study the law, regulations and rules and other written guidance being issued by
Congress, the Treasury Department and the SBA as well as guidance being issued
by the AICPA, banks and other recognized authorities.
45.
S&W estimates that its staff spent collectively approximately 65 man
hours of non-billable time learning about the PPP, including, without limitation,
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 15 of 35

studying the CARES Act and SBA interim rules, reading on-line guidance from
institutions, such as the AICPA and articles from other accounting professionals,
participating in on-line information sharing groups and blogs and even waking at
3:00 am to watch an on-line webinar on the PPP before beginning the normal work
day.
46.
It was generally understood from the available literature that the
demand for PPP loans would vastly outweigh the $349 billion that Congress had
first appropriated for the program and that because loans would be given out on a
“first come/first serve” basis, it was imperative to apply for PPP loans as soon as
possible to obtain that highest chance of obtaining one.
47.
S&W also initiated contact with its hardest hit small business clients to
inform them of the PPP and advise them that if the PPP loan was used to keep its
employees employed during the pandemic, all or a substantial portion of the PPP
loan would be forgiven.
48.
Shortly after the PPP became public, S&W was literally inundated with
requests from its clients for assistance in applying for PPP loans, many of which
were desperately trying to avoid laying off their employees.
49.
Of its approximately 200-250 clients that could apply for a PPP loan,
in the months of March and April, S&W assisted approximately 50 clients in
preparing, processing and filing PPP loan applications with various PPP Lenders in
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and about Pensacola.
50.
In fact, due to the immediate demand of these clients, the fact that it
was being projected that the $349 billion allocated for the PPP would be exhausted
within a short period of time and that the PPP was set up on a first come/first serve
basis, S&W’s normal accounting and tax work was substantially interrupted in order
to immediately service its clients’ demands to apply for PPP loans and the urgency
of doing so to obtain the best chance of obtaining them.
51.
S&W’s total billable time (to date) to assist its clients in applying for
PPP Loans is $13,799, none of which has yet been paid by the PPP Lenders. While
a few PPP Lenders have advised S&W that they intend to pay all or a portion of
S&W’s fees for the services it provided to such PPP Lenders’ Bank Customers, to
date, S&W has received nothing.
ServisFirst
52.
On or about April 2, 2020, S&W was asked by one of its small business
clients (hereinafter “Client R”) to assist it in applying for a PPP loan.
53.
Client R is a engineering firm specializing in the design and
manufacturing of equipment used by mechanics to repair vehicles. It is a Florida
limited liability company with its principal place of business is in Pensacola, Florida.
Client R qualifies as a small business and has 8 employees. Its primary bank is
ServisFirst.
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54.
Due to the COVID-19 pandemic and the cessation of almost all of its
business, Client R was considering furloughing a number of its workers.
55.
In applying for a PPP loan with ServisFirst on behalf of Client R, S&W
expended 6.8 hours of time preparing, processing and filing the PPP loan application
and supporting documents resulting in billable time of $723. S&W will also be
required to provide assistance to Client R to prepare the necessary certifications that
are required by the CARES Act and the SBA rules for the PPP loan to be forgiven
by the SBA (the “Back End Work”).
56.
Between April 2, 2020 and April 7, 2020, S&W prepared, signed as
PPP Agent, hand delivered and e-mailed to Client R and/or ServisFirst different
iterations of the PPP loan applications and supporting documents, and as a result,
ServisFirst knew that S&W was acting as Client R’s PPP Agent.
57.
ServisFirst ultimately created a PPP loan application portal which they
required Client R to use to apply for the PPP loan. On April 7, 2020, Client R filed
its PPP loan application through ServisFirst’s portal using the information and
documents that S&W had prepared as Client R’s PPP Agent and requested a PPP
loan in the amount of $94,165.
58.
On or about April 10, 2020, Client R received the PPP loan it had
applied for with S&W’s assistance as PPP Agent in the amount of $94,165. Based
on the size of this loan, ServisFirst received or will receive in accordance with the
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 18 of 35

SBA First Interim Rule a PPP loan processing fee of $4,708.25 (5% x $94,165) and
from such amount, ServisFirst is required under the same SBA rule to pay S&W’s
fees as Client R’s PPP Agent, but not more than $941.65 (1% x $94,165), i.e., the
PPP Agent Fees Cap.
59.
On or about April 17, 2020, Client R asked ServisFirst about payment
of S&W fees as Client R’s PPP Agent. ServisFirst advised Client R that “[t]he SBA
guidance on charging the client fees changed late in the game. The Bank has made
a decision to not pay agents.” Client R communicated this to S&W that same day.
60.
ServisFirst representation to Client R on April 17, 2020 that the SBA
guidance “changed” is false and misleading. In fact, the SBA First Interim Rule that
was issued on April 2, 2020 and which mandated that that the PPP “Agent fees will
be paid by the lender out of the fees the lender receives from SBA” has, as of the
date of this Complaint, not changed at all.
61.
To date, S&W has not been compensated by ServisFirst for its services
as Client R’s PPP Agent, and S&W has not billed or been paid by Client R for such
services due to the SBA First Interim Rule which precludes S&W from doing so.
Synovus
62.
On or about March 24, 2020, S&W was asked by another small
business client (“Client C”) to assist it in applying for a PPP loan.
63.
Client C is a medical group with its principal place of business in
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Pensacola, Florida that specializes in predominately elective surgical procedures.
Client C qualifies as a small business and has 9 employees. Its primary bank is
Synovus.
64.
Because the procedures that Client C performs for its patients are
predominately elective procedures, Client C’s business had all but stopped due to
the COVID-19 pandemic and it was considering furloughing its staff.
65.
In applying for a PPP loan with Synovous on behalf of Client C, S&W
expended 8.67 hours of time preparing, processing and filing the PPP loan
application and supporting documents resulting in billable time of $893.75. S&W
will also be required to provide assistance to Client C for the Back End Work.
66.
On or about April 1, 2020, S&W prepared a PPP loan application which
was signed by the client and S&W as its PPP Agent. Thereafter, S&W interfaced
with Synovus and assisted in resolving a mismatching of Client C’s name by
Synovus that caused a delay to its PPP loan application.
67.
As a result of such interactions, Synovus therefore knew that S&W was
acting as Client C’s PPP Agent in connection with Client C’s PPP loan application.
68.
On April 9, 2020, S&W asked Synovus about the payment of S&W
fees as Client C’s PPP Agent. Synovus advised S&W that Synovus had decided that
it would not pay PPP Agents’ fees.
69.
In fact, Synovus advised S&W that it understood that other PPP Agents
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were being paid to gather and assemble the supporting financial information but just
not to prepare the actual 2-page SBA PPP loan application.
70.
After S&W interfaced with Synovus’ PPP team and the mismatched
name issue was resolved, on or about April 17, 2020, Client C was finally able to
access Synovus’ online portal to apply for a PPP loan, and Client C did so using the
financial information and supporting documentation that S&W had prepared for it
as its PPP Agent. The application sought a PPP loan in the amount of $163,303.
71.
On or about, April 21, 2020, Client C received its PPP loan in the
amount of $163,303.
72.
Based on the size of this PPP loan, Synovus received or will receive in
accordance with the SBA First Interim Rule a PPP loan processing fee of $8,165.15
(5% x $163,303) and from such amount, Synovus is required under the same SBA
rule to pay S&W’s fees as Client C’s PPP Agent, but not more than $1,633.03 (1%
x $163,303), i.e., the PPP Agent Fees Cap.
73.
To date, S&W has not been compensated by Synovus for its services
as Client C’s PPP Agent and it has not billed or been paid by Client C for such
services due to the SBA First Interim Rule which precludes S&W from doing so.
CLASS ACTION ALLEGATIONS
74.
As noted above, Plaintiff brings this action on behalf of itself and a
state-wide class, defined as indicated below.
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 21 of 35

75.
The Class Definition: All PPP Agents in the State of Florida who
assisted PPP Lenders’ Bank Customers in obtaining PPP loans but were refused
payment of their PPP Agents’ fees by the applicable PPP Lender.
76.
Excluded from the Class are Defendants, as well as their officers,
employees, agents, board members and legal counsel, and any judge who presides
over this action (or spouse or family member of presiding judge), as well as all past
and present employees, officers and directors of the Defendants.
77.
S&W reserves the right to expand, limit, modify, or amend this Class
definition, including the addition of one or more subclasses, in connection with
Plaintiffs' motion for Class certification, or at any other time, based upon, inter alia,
changing circumstances and/or new facts obtained during discovery, including,
without limitation, converting this case to a national class action or a multidistrict
litigation.
78.
Numerosity: The Class is composed of thousands of PPP Agents, whose
joinder in this action would be impracticable. The disposition of their claims through
this class action will benefit all Class Members, the parties and the courts.

79.
Existence and Predominance of Common Questions of Fact and Law:
There is a well-defined community of interest in questions of law and fact affecting
the Class. These questions of law and fact predominate over individual questions
affecting individual Class Members, including, but not limited to, the following:
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 22 of 35

a.
Did PPP Lenders have the legal right to refuse to compensate PPP
Agents who assist the PPP Lenders’ Bank Customers in successfully
applying for PPP loans?
b.
Did PPP Lenders have a policy and/or practice of refusing to pay PPP
Agents for their services in assisting PPP Lenders’ Bank Customers to
successfully apply for a PPP loan?
c.
Were PPP Agents required to first reach agreement with a PPP Lender
as to the fee the PPP Lender would pay the PPP Agent for assisting the
PPP Lender’s Bank Customer in applying for a PPP loan in order to
have the right to receive such fee?
d.
Did the PPP Lenders’ conduct constitute “unfair or deceptive acts or
practices in the conduct of any trade or commerce” under the Fla. Stat.
§501.204(1)?
e.
Did PPP Lenders benefit from the services that the PPP Agents
provided to the PPP Lenders’ Bank Customers such that the PPP
Lenders are required to compensate the PPP Agents under equitable
principles, such as quantum meruit?
f.
Whether the PPP Lenders’ conduct, as alleged herein, was intentional
and knowing?
g.
Whether Class Members are entitled to damages and/or quantum
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 23 of 35

meruit for the reasonable and customary value of their services as PPP
Agents and if so, how is that to be determined;
h.
Whether Class Members are entitled to be paid for the Back End Work
from the PPP loan origination fees paid to the PPP Lenders by the SBA
and if so, when can a PPP Agent seek payment for the Back End Work;
and
i.
Whether Plaintiffs and Class Members are entitled to an award of
reasonable attorney's fees, pre-judgment interest and costs of suit.
80.
Superiority: In engaging in the conduct described herein, Defendants
have acted and failed to act on grounds generally applicable to Plaintiff and other
Class Members. Such conduct requires the Court’s imposition of uniform relief to
ensure compatible standards of conduct toward Class Members and to make
injunctive or corresponding declaratory relief appropriate for all Class Members. A
class action is superior to all other available means for the fair and efficient
adjudication of Plaintiff’s and the Class Members’ claims. Few, if any, Class
Members could afford to seek legal redress of the wrongs complained herein on an
individual basis. Absent class action, Class Members and the general public would
not likely recover, or have the chance to recover, damages or restitution, and
Defendants would be permitted to unjustly retain the proceeds of their misdeeds.

Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 24 of 35

81.
Typicality: Plaintiff’s claims are typical of, and are not antagonistic to,
the claims of all Class Members. Plaintiffs and the Class Members have all been
damaged by Defendants’ unfair and unlawful practice of refusing to compensate
PPP Agents for their services assisting the PPP Lenders’ Bank Customers in
applying for PPP loans as mandated by the SBA First Interim Rule, as alleged herein.
The factual and legal bases of Defendants’ liability to Plaintiff and each Class
Member are substantially similar, resulting in injury to Plaintiff and each Class
Member as a result of Defendants’ actions as described herein.
82.
Adequacy: Plaintiff is an adequate representative of the Class because
it is a member of the Class and Plaintiff’s interests do not conflict with the interests
of the Class Members that Plaintiff seeks to represent. Plaintiff will fairly and
adequately represent and protect the interests of other Class Members. Plaintiff has
retained counsel with substantial experience in litigating complex cases. Both
Plaintiff and its counsel will vigorously prosecute this action on behalf of the Class
and have the financial ability to do so. Neither Plaintiff nor counsel has any interest
adverse to other Class Members.

83.
Ascertainability: Plaintiff and the Class Members are informed and
believe that because the vast majority of PPP Agents have professional licenses
(CPAs, attorneys, and other licensed financial professionals) and are registered with
the State of Florida and because the SBA keeps extensive computerized records of
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 25 of 35

their PPP loans as well as their borrowers (i.e., the PPP Lenders’ Bank Customers)
and associated PPP Lenders through, inter alia, computerized PPP loan application
systems and Federally mandated record keeping which include contact information,
including email and home mailing addresses, Plaintiff submits that the vast majority
of Class Members, if not 100% of Class Members, may be identified and
ascertained, and accordingly, notice of this action could be disseminated in
accordance with due process requirements.
FIRST CLAIM FOR RELIEF
On Behalf of the Class
Against All Defendants
(Violation of the Florida Unfair and Deceptive Trade Practices Act)

84.
Plaintiff repeats and re-alleges the allegations in Paragraphs 1 through
83 of the Complaint as though fully set forth herein and incorporates the same by
this reference.
85.
Plaintiff asserts this cause of action on behalf of itself and members of
the Class.
86.
Section 501.204(1) of Florida Unfair and Deceptive Trade Practices
Act (“FDUTPA”), Fla. Stat. §501.201 et seq., provides that “unfair or deceptive acts
or practices in the conduct of any trade or commerce are hereby declared unlawful.”
The provisions of the Act shall be “construed liberally to promote the protection” of
the “consuming public and legitimate business enterprises from those who engage
in… deceptive[] or unfair acts or practices in the conduct of any trade or commerce.”
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 26 of 35

Fla. Stat § 501.204(2) (2020).
87.
Defendants were, at all times material to the allegations herein, engaged
in “trade or commerce’ as defined by the Act. Fla. Stat. § 501.203 (2014).
88.
Defendants, as PPP Lenders, knew or should have known that many of
their Bank Customers were not sophisticated enough and/or lacked the necessary
accounting skills and/or did not maintain the necessary financial data, to be able to
successfully apply for a PPP loan without the assistance of a PPP Agent.
89.
Defendants also knew or should have known that their Bank Customers
would seek the assistance and in fact did seek the assistance of CPAs, attorneys and
other PPP Agents to assist them in applying for PPP loans with Defendants.
90.
Based on the assistance from the PPP Agents, the Bank Customers
successfully applied for PPP Loans with their PPP Lenders which were issued by
the SBA.
91.
As a result of these PPP loans, the SBA has paid the PPP Lenders the
processing fees that are due PPP Lenders under the SBA First Interim Rule. These
processing fees include the fees (subject to the PPP Agent Fees Cap) that that are
due and owing to PPP Agents for their services.
92.
The Defendants obtained the services of and benefits provided by the
PPP Agents to the Defendants’ Bank Customers and as a result, Defendants have
earned substantial PPP loan processing fees, but have refused to compensate the PPP
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 27 of 35

Agents the reasonable and customary fees that the PPP Agents are owed for assisting
such Bank Customers as PPP Agents as mandated by the SBA First Interim Rule
and accordingly, Defendants’ refusal to do so is an unfair and deceptive business act
or practice.
93.
Through their unfair acts and practices, Defendants have improperly
obtained fees from the Federal government at the expense of Plaintiff and the Class.
94.
As such, Plaintiff requests that this Court cause Defendants to disgorge
the portion of these fees that Congress intended to be used to pay PPP Agents the
reasonable and customary fees for their services, and to enjoin Defendants from
continuing to violate the FDUTPA as discussed herein and/or from violating the
FDUTPA in the future, particularly because Congress has allocated an additional
$320 billion in funds for the PPP on April 21, 2020 and a new round of PPP loan
applications is already underway. Otherwise, Plaintiff, the Class and members of the
general public may be irreparably harmed and/or denied an effective and complete
remedy if such an order is not granted.

WHEREFORE, Plaintiff, individually and on behalf of the Class, prays for
relief as follows:
a.
For an order certifying the Class as defined above, appointing
Plaintiff as Class representative for the Class, and appointing
Plaintiff’s counsel as Class counsel for the Class;
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 28 of 35

b.
That the Court adjudge and decree that Defendants have engaged
in the conduct complained of herein;.
c.
That the Court adjudge and decree that the conduct complained
of in refusing to pay the reasonable and customary fees of PPP
Agents that assist the PPP Lenders’ Bank Customers in
successfully applying for PPP loans constitutes deceptive and
unfair trade practices in violation of the Florida Deceptive and
Unfair Trade Practices Act, Chapter 501, Part II, Florida
Statutes;
d.
That the Court enjoin the Defendants from further violations of
FDUTPA;
e.
That the Court enjoin the Defendants from failing to pay the
reasonable and customary fees of PPP Agents that assist PPP
Lenders’ Bank Customers in successfully applying for PPP loans
as required by the SBA First Interim Rule;
f.
That the Court award damages (not to exceed the PPP Agent
Fees Cap), civil penalties, attorney’s fees, prejudgment interest
and costs to the Plaintiff for the prosecution of this action
pursuant to Section 501.2105, Florida Statutes;
g.
Award any such equitable or other relief pursuant to Section
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 29 of 35

501.207(3), Florida Statutes;
h.
Award such other and further relief as the Court deems just and
proper; and
i.
Plaintiff hereby demands a jury trial.
SECOND CLAIM FOR RELIEF
On Behalf of the Class
Against All Defendants
(Unjust Enrichment)

95.
Plaintiff repeats and re-alleges the allegations in Paragraphs 1 through
83 of the Complaint as though fully set forth herein and incorporates the same by
this reference.
96.
Plaintiff asserts this cause of action on behalf of itself and members of
the Class.
97.
Plaintiff performed services for the PPP Lenders’ Bank Customers by
assisting them in successfully preparing, processing and filing PPP loan applications
and incurred costs in that effort which also benefited Defendants.
98.
Defendants knew or should have known of the services Plaintiff was
providing as a PPP Agent to the Defendants’ Bank Customers, of the benefits those
services provided and of Plaintiff’s expectation of being compensated the reasonable
and customary fees for such work as provided under the SBA First Interim Rule.
99.
Defendants accepted Plaintiff’s services and retained the benefit of
those services by, inter alia, obtaining PPP loans for their Bank Customers for which
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 30 of 35

they received substantial fees from the SBA under the SBA First Interim Rule.
100. Defendants have been unjustly enriched as a result, and under the
circumstances, it would be inequitable for them to retain all of SBA PPP loan
processing fees paid to them by the SBA without paying Plaintiff for the value of its
services as PPP Agent. In addition and/or in the alternative, under the totality of all
of the circumstances, Plaintiff is entitled to a reasonable fee for its services as PPP
Agent plus reimbursement of their costs.
WHEREFORE, Plaintiff, individually and on behalf of the Class, prays for
judgment against Defendants for unjust enrichment as follows:
a.
For an order certifying the Class as defined above, appointing
Plaintiff as Class representative for the Class, and appointing
Plaintiff’s counsel as Class counsel for the Class;
b.
For an award of the reasonable value of the services provided by
each PPP Agent and/or the amount by which Defendants were
unjustly enriched (not to exceed the PPP Agent Fees Cap);
c.
For all costs of suit;
d.
For post judgment interest at the maximum legal rate;
e.
For such other and further relief as deemed just and proper;
f.
For reasonable attorneys' fees; and
g.
Plaintiff hereby demands a jury trial.
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 31 of 35

THIRD CLAIM FOR RELIEF
On Behalf of the Class
Against All Defendants
(For Declaratory Relief)

101. Plaintiff repeats and re-alleges the allegations in Paragraphs 1 through
83 of the Complaint as though fully set forth herein and incorporates the same by
this reference.
102. Plaintiff asserts this cause of action on behalf of itself and members of
the Class.
103. Plaintiff asserts that SBA First Interim Rule mandates that the PPP
“Agent fees will be paid by the lender out of the fees the lender receives from SBA.”
104. On information and belief, Defendants assert that the SBA First Interim
Rule is discretionary and PPP Lenders have the right to choose not to compensate
PPP Agents that assist the PPP Lenders’ Bank Customers in successfully applying
for PPP loans.
105. There is an actual controversy between Plaintiff and Defendants
regarding whether PPP Lenders are required under the SBA First Interim Rule to
compensate PPP Agents as asserted by Plaintiff herein.
106. Plaintiff is entitled to a binding declaration of its rights to be
compensated by PPP Lenders as asserted herein.
WHEREFORE, Plaintiff respectfully requests this Court to enter a
declaration having the force of a final judgment that PPP Lenders are required to
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 32 of 35

pay the reasonable and customary fees of PPP Agents (not to exceed the PPP Agent
Fees Cap) who assist a PPP Lender’s Bank Customer in successfully applying for a
PPP loan out of the PPP loan processing fees received by such PPP Lender from the
SBA with respect to the applicable PPP loan issued to such Bank Customer.
FOURTH CLAIM FOR RELIEF
On Behalf of the Class
Against All Defendants
(Injunction)

107. Plaintiff repeats and re-alleges the allegations in Paragraphs 1 through
83 of the Complaint as though fully set forth herein and incorporates the same by
this reference.
108. Plaintiff asserts this cause of action on behalf of itself and members of
the Class.
109. PPP Lenders’ obligation to pay PPP Agents for their services is
mandated by the SBA First Interim Rule.
110. Defendants’ conduct in refusing to pay PPP Agents for their work in
successfully assisting PPP Lenders’ Bank Customers to apply for PPP loans is
unlawful and unjust enrichment and is causing irreparable injury to Florida small
businesses, because PPP Agents will cease assisting such Bank Customers if they
are not entitled to be compensated for their work.
111. As a result, many Florida small business will not receive PPP loans and
many will fail, causing the unemployment of thousands of Florida workers, contrary
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to the intent of Congress in creating the CARES Act and the PPP.
112. PPP Agents, Bank Customers and indeed the public in general will be
irreparably harmed if the PPP Lenders’ unlawful conduct is allowed to continue.
113. Plaintiff has raised sufficiently serious questions going to the merits of
the causes of action asserted herein to make them a fair ground for litigation and the
balance of hardships tip decidedly in Plaintiff’s and the Class’ favor.
114. For the reasons identified above, Plaintiff and those similarly situated
are without an adequate remedy at law absent an injunction prohibiting the PPP
Lenders from refusing to pay the reasonable and customary fees of PPP Agents that
perform services for PPP Lenders’ Bank Customers to successfully apply for PPP
loans.
WHEREFORE, Plaintiff respectfully requests this Court to enter an
injunction ordering that PPP Lenders are enjoined and restrained from refusing to
pay the reasonable and customary fees of PPP Agents (not to exceed the PPP Agent
Fees Cap) who assist a PPP Lender’s Bank Customer in successfully applying for a
PPP loan out of the loan processing fees received by such PPP Lender from the SBA
Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 34 of 35

with respect to the applicable PPP loan issued to such Bank Customer.
JURY DEMAND
Plaintiff requests trial by jury of all claims that are so triable.
VERIFICATION

I hereby swear under penalty of perjury that the foregoing is true and correct
to the best of my knowledge.

/s/ John S. Wirt

Counsel for the Plaintiff
Sport & Wheat CPA PA

Dated:
April 26, 2020

Respectfully submitted,

/s/ John S. Wirt

John S. Wirt, Esq.

WIRT & WIRT, P.A.

5 Calhoun Ave, Suite 306

Destin, FL 32541

Tel: 847-323-4082

Fax: 314-431-6920

jwirt@wirtlawfirm.com

Attorneys for the Plaintiff
Sport & Wheat CPA PA

FL Bar # 0117640

Case 3:20-cv-05425-TKW-HTC Document 1 Filed 04/26/20 Page 35 of 35

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Verified Emergency Class Action Complaint — Sport & Wheat CPA v. ServisFirst Bank (N.D. Fla. 2020)

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